Tax Basics
From filing requirements to withholding amounts, learn about tax basics here.
Tax Basics Stories
- Your personal details, including your Social Security number, address, and the name and taxpayer ID number of your spouse.
- A copy of your 2008 tax return.
- A list of tax payments made in 2008.
Think of your tax refund as a free loan to government
![taxes](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2010/01/tax-help.jpg)
It's less of a shock to the system when the IRS is paying you, rather than the other way around, but ideally, you want to get as close to hitting the nail on the head as you can, so very little money changes hands come April 15. Why? Well, I think the downside of owing money to the IRS is pretty self explanatory.
But when it comes to refunds, a lot of people like getting that check in the mail every year. They count on it, and use it to wipe out debt, or buy a big purchase they've been putting off, or - I hope - boost their savings a bit. Financially speaking, though, getting a refund means you've given the IRS an interest-free loan. They've been sitting on your cash, when it could have been in your paycheck each month, keeping you out of debt in the first place, or in your savings or retirement account, earning a return on your investment.
How to file a tax extension, no matter how disorganized you are
![](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/media/2008/07/389666281_930efe575f_m%5B1%5D.jpg)
If you need more time to prepare your federal tax return, you'll need to file an extension.
To get started, you need the following information:
Last-minute tax filing questions answered by WalletPop experts
![last-minute tax advice](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2010/01/taxes.jpg)
Question:
I'm attending school right now and am filling out my tuition tax form. What is my qualified expense? What about scholarships?
-- Mariela
Answer from Jennifer Lane, owner of Compass Planning Associates Inc. and author of "The Complete Idiot's Guide to Protecting Your 401(k) and IRA"
Your school should provide you with a Form 1098-T Tuition Statement. Qualified tuition expense will show in box 2 and scholarships and grants in box 5. Many schools have added information about the 1098-T to their Web sites, but you can also find out information direct from the IRS at Instructions for 1098-T.
Answer from Jennifer Lane, owner of Compass Planning Associates Inc. and author of "The Complete Idiot's Guide to Protecting Your 401(k) and IRA"
Your school should provide you with a Form 1098-T Tuition Statement. Qualified tuition expense will show in box 2 and scholarships and grants in box 5. Many schools have added information about the 1098-T to their Web sites, but you can also find out information direct from the IRS at Instructions for 1098-T.
What you need to know about the dreaded Alternative Minimum Tax
![](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2010/03/taxunclesam186.jpg)
But something strange happened with the AMT. The government never indexed the tax for inflation, meaning it started affecting a growing number of people as wages and other earnings kept pace with inflation. Additionally, a number of traditionally "high wage earner" tax preference items, like stock options, became more popular with middle class taxpayers. By 1970, more than 19,000 taxpayers were affected by the tax.
Business mileage deductions could cut your tax bill
![business mileage deductions explained](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2010/02/87085.jpg)
Are you eligible for the Making Work Pay tax credit and Schedule M?
![Making Work Pay tax credit explained](http://web.archive.org./web/20100807212757im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2010/02/sal0016rainbow.jpg)
Who is eligible to claim the credit?
The Making Work Pay credit is intended to provide tax relief for working and middle class families. This means most taxpayers will be eligible for the credit, but there are some exceptions:
Are you an early filer? If so, odds are you're getting a refund
There are a few things in life that are clear cut. You like Pepsi or you like Coke, you like Ford or you like Chevy and you file your taxes early or you line up at the post office at 11:58 on April 15th. For most people, choosing when to file your taxes boils down to one thing; will you owe Uncle Sam or will you be paying off the HDTV you bought for the Super Bowl with your refund. The good news is that, statistically, if you do file early you are more likely to receive a refund -- and a generous one at that.
How to avoid tax penalties after an audit
The good news: You survived an audit. So what now?
If you are audited and the result is that there are no adjustments to your return (or if you get a refund), it decreases your odds of being audited in subsequent years. If you are audited on the same items two years in a row with no additional taxes due, the IRS manual actually recommends that you not be audited for the same items for another year.
But what if you are audited and the IRS finds that you owe additional tax? You'll want to resolve those outstanding tax liabilities as soon as possible in order to avoid further interest and penalties.
5 tips for maximizing tax deductions
When it comes to deductions, many taxpayers miss out -- not because they don't qualify for the deductions, but because they fail to keep good records. It's often difficult to remember on April 15 all of the miles you've driven, charities you've supported and taxes you've paid. Here are five tips for maximizing your tax deductions throughout the year:
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Free Tax Tools for Late FilersTaxes: Basics
Anyone seeking help with taxes should start with the fundamentals. Here are the basics of taxes.
Linda DoellAug 6th 2010 @ 2:45PM Filed Under: Family Money, Saving Money, Shopping, Tax, School, Consumer Ally, Economizer
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